• by Ross Fadner , March 16, 2004

In the next year, less than one-third of U.S. households will be interested in upgrading to high-speed Internet service, according to a study released Tuesday by The Parks Associates.

The study, "Trends in U.S. Broadband Adoption," notes that at the end of 2002, the number of Internet users planning to upgrade to broadband was nearly 50 percent--a number that was achieved in 2003. But in 2004, the study indicates tepid interest in broadband upgrades by narrowband subscribers and an overall slowing of broadband growth.

Parks Associates claims that broadband providers will have to offer more attractive benefits to consumers in the form of unique packages or big price cuts.

"Interest in upgrading to broadband seems to have peaked in the fourth quarter of 2002 at around 50 percent, a level of interest that translated into hefty subscriber additions during 2003. As interest in upgrading declines, broadband service providers must reinvent the broadband market message, significantly lower what they charge for service, or offer some unique combination of these two strategies," said Michael Greeson, VP-research and strategy, Parks Associates, in a statement.

ComScore Networks recently released similar findings in a study reported on in last week's MediaDailyNews. That study found that one in four narrowband Internet users intend to switch to broadband in the next six months.

A Leichtman Research Group study projected that broadband penetration would grow from 25 million broadband subscribers in 2004 to 50 million by 2008, a further indication that broadband adoption rates are slowing.